In a recent decision, the Minister of Commerce, Dr. Majid Al Qasabi, threatened all companies and establishments that committed violations of not disclosing “true beneficiary” data or did not undertake to submit an annual confirmation of that data by the scheduled date.
The decision provides that violators will have a (30) day period from the day after the warning date to rectify the situation before direct financial penalties are imposed.
The fines stipulated in the decision are determined according to the size of the company’s capital, ranging from 4,000 riyals for companies with capital of less than 500,000 riyals to 20,000 riyals for companies with capital of 500,000 to 2.5 million riyals. For companies with capital between 2.5 million riyals and 5 million riyals, a fine of 40,000 riyals will be imposed, and for companies with a capital of more than 5 million riyals, a maximum fine of 80,000 riyals will be imposed.
The decision also provides for the doubling of the prescribed fine in case of repeated violations of failure to submit annual data confirmation within one year after the issuance of the final decision, provided that the total fine does not exceed the maximum limit (500,000 Saudi Riyals). These procedures are carried out as part of the implementation of the provisions of the Companies Act and beneficial owner disclosure rules and are aimed at identifying the natural persons who own or ultimately exercise actual control over the facility.
In a recently issued decision, the Minister of Commerce, Dr. Majid Al Qasabi, warned all companies and establishments that committed violations of not disclosing information on “beneficiary owners” or failing to comply with the submission of annual confirmations of that information by specified deadlines.
The decision provides that violators will be given a (30) day grace period from the day after the warning date to rectify the situation before direct financial penalties are imposed.
The fines stipulated in this decision vary depending on the capital size of the company, reaching a fine of 4,000 riyals for companies with a capital of less than 500,000 riyals and a fine of 20,000 riyals for companies with a capital of between 500,000 and 2.5 million riyals. Companies with a capital of between 2.5 million riyals and 5 million riyals will be subject to a fine of 40,000 riyals, and companies with a capital of more than 5 million riyals will be subject to a maximum fine of 80,000 riyals.
The decision also provides that in the event of repeated violations of failure to submit annual verification of data within one year after the issuance of the final decision, the fines imposed will be doubled, unless the total fine exceeds the maximum limit (500,000 Saudi Riyals). These measures are in line with the provisions of the Companies Act and the rules on disclosure of beneficial ownership, which aim to identify the natural persons who own or ultimately have effective control over a facility.
